India gold declines as dollar moves up

Business

oi-Monika

By Monika Nihalani

Published: Wednesday, December 14, 2011, 12:26 [IST]

Gold which was used to be one of the most attractive investment options during the times of economic uncertainties has somehow lost its 'flight to safety' tag. Globally, investors are parking surplus to the Dollar due to rising fears about the future of the euro zone.

Historically, gold and dollar share an inverse relationship with each other and the recent spike in dollar has weighed gold down.

The Indian Rupee has touched a record low of 53.75 against Dollar on Wednesday, which is driving gold down again.

MCX gold futures for February delivery opened at Rs 28,810 per 10 grams and touched a low of Rs 28,631 per 10 grams during the initial session. The metal was seen trading in the range of Rs 28,722 – Rs 28,727 per 10 grams at 12:20 pm IST.

Overseas spot gold also slid further, was seen around US $1,637 - $1,638 a troy ounce.

Gold may dip further if dollar continue rising against the major currencies.

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